The sale of the low-end server operation, which still needs US government approval, will allow IBM to focus on its decade-long shift to more profitable software and services.

IBM said earlier this month that it would spend more than $1.2 billion to build up to 15 data centres on five continents, in an effort to expand its cloud services and reach new clients and markets.

Lenovo's acquisition will lift its market share in the server area from 2 per cent to 14 per cent.

Senior vice-president at Lenovo Peter Hortensius says the company is planning a raft of changes.

"We will do a variety of things - improve products, drive improved costs, and couple it with the scale we have and our PC business to improve go-to-market," Mr Hortensius said.

The deal needs clearance from the Committee on Foreign Investment in the United States (CFIUS), which is charged with protecting US national security.

Chinese companies faced the most scrutiny over their US acquisitions in 2012, according to a CFIUS report last December.

Turning around losses

With Lenovo's PC business under siege from powerful smartphones and super-fast tablets, the company is diversifying its revenue and remodelling itself as a force in mobile devices and data storage servers.

Maybank Kim Eng analyst Warren Lau says Lenovo will have its work cut out to turn around IBM's server unit.

The low-margin server business has posted seven quarters of losses as more clients switch to cloud storage.

"To generate costs synergy, Lenovo will need to move most of the manufacturing from IBM's existing facility in Virginia to Asia while keeping some R&D in the US," Mr Lau said.

Following closure of the deal, Lenovo will offer jobs to 7,500 IBM employees around the world and assume customer service and maintenance operations.

Lenovo has agreed to pay $2.07 billion in cash and the rest with stock of the Hong Kong-listed PC maker.